Daily Journal Corporation announces the financial results of
LOS ANGELES, Aug. 12, 2022 (GLOBE NEWSWIRE) — In the nine months ended June 30, 2022, Daily Journal Corporation (NASDAQ: DJCO) reported consolidated revenue of $34,797,000, compared to $37,952,000 a year former. This decrease of $3,155,000 is mainly attributable to the decrease in (i) Journal Technologies license and maintenance fees of $3,269,000 and public service fees of $21,000, and (ii) circulation revenues of $179,000 from Journal Technologies, partially offset by increases to Journal Technologies consulting fees of $48,000 and traditional business net advertising revenue of $30,000 and advertising services and other fees of $236 $000.
Traditional business pre-tax income increased $1,372,000 to $1,442,000 from $70,000 in the prior year period, primarily due to a reduction in compensation expense long-term increment of $25,000 compared to an increase of $1,410,000 in the prior year period. The Journal Technologies business segment’s pre-tax loss increased by $5,360,000 to $3,116,000 from the prior year’s pre-tax profit of $2,244,000, primarily due to lower revenue resulting the Company’s decision to discontinue maintenance of its legacy software products effective July 1. 2021 to focus on supporting Journal Technologies’ core eSeries products. During the nine months ended June 30, 2022, the Company sold a portion of its marketable securities for approximately $80,570,000, realizing net gains on the sale of these marketable securities of $14,249,000 (compared to $18,478,000). net realized gains in the prior year period), and borrowed an additional net amount of $43,000,000 from the margin loan account to primarily purchase additional marketable securities at a total cost of approximately $117,678 $000. Additionally, there were increases in net unrealized losses on marketable securities of $188,829,000 to $57,075,000 from net unrealized gains of $131,754,000 in the prior year period. . The Company’s investments generated approximately $4,251,000 in dividend income for the nine months ended June 30, 2022, compared to $2,063,000 for the prior year period. For the nine months ended June 30, 2022, consolidated pre-tax loss was $40,532,000, compared to pre-tax profit of $154,434,000 in the prior year period. The net earnings (loss) per common share is based on the weighted average number of shares outstanding during the comparable financial periods. The shares used in the calculation were 1,380,542 and 1,380,746 for the nine months ended June 30, 2022 and 2021 respectively. There was a consolidated net loss of $30,797,000 ($-22.31 per share) for the nine months ended June 30, 2022, compared to consolidated net earnings of $114,319,000 ($82.80 per share). share) for the prior year period.
The Company believes that the coronavirus pandemic has had and, together with the cases of the Delta and Omicron variants, and more recently the more contagious cases of the BA.4 and BA.5 subvariants, will continue to have a significant impact on the business. of the society. operations. Governments may again take action in response to the pandemic, such as renewed closure or reduction of operations of courts and other government agencies that are clients of the Company. It could also include a certain degree of volatility in the value of the marketable securities of the Company. As of June 30, 2022, the Company held marketable securities worth $341,855,000, including net unrealized pre-tax gains of $187,018,000, and recognized a deferred tax liability of $50,540,000 for estimated income taxes due only on sales of net appreciated securities.
For the nine months ended June 30, 2022, the Company recorded a tax benefit of $9,735,000 on the pre-tax loss of $40,532,000. The tax benefit consisted of a tax benefit of $15,425,000 on unrealized losses on marketable securities and a benefit of $250,000 for the deduction of dividends received and other permanent accounting and tax differences, offset by provisions taxes of $3,850,000 on realized gains on marketable securities, $500,000 on operating income and $1,590,000 for the effect of a change in state allocation on the commencement of liabilities of deferred tax for the year. Accordingly, the overall effective tax rate for the nine months ended June 30, 2022 was 24%, after taking into account taxes on realized capital gains and unrealized capital losses on securities of placement.
Daily Journal Corporation publishes newspapers and websites covering California and Arizona, and produces several specialty news services. Journal Technologies, Inc. is a wholly owned subsidiary and provides case management software systems and related products to courts and other legal agencies.
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements in this press release are “forward-looking” statements that involve risks and uncertainties that may cause actual future events or results to differ materially from those described in the forward-looking statements. Words such as “expects”, “intends”, “anticipates”, “should”, “believes”, “will”, “plans”, “estimates”, “may”, variations of these words and similar expressions are intended to identify these forward-looking statements. We disclaim any intention or obligation to revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot guarantee that these expectations will prove to be correct. Additional information regarding factors that could cause actual results to differ materially from those contained in the forward-looking statements is contained from time to time in documents we file with the Securities and Exchange Commission.
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